'Hostess' fails service test

The raging battle between Hostess Brands and its unionized workers doesn't make survival look promising, despite Tuesday's last-ditch effort, with a bankruptcy judge, to preserve the company.

Yet even if Hostess survives, it will take a revolutionary change in management to improve matters in the long run.

The Texas-based company makes the pretty yellow, cream-filled Twinkies cakes, the filled chocolate rolls called Ho Hos and the equally iconic Wonder bread, among other familiar products. It has 36 bakeries, 242 distribution depots, 216 retail outlets and 311 other facilities, but has been in financial difficulties for a long time. When the company filed for Chapter 11 bankruptcy protection in January, it was the second time in less than 10 years. Management regularly complained about the cost of running a unionized workforce and had a history of disputes with those unions. This time around Hostess wanted not only to slash wages, but to greatly reduce its pension costs, from $100 million to $25 million a year, and cut health benefits.

One union, the Teamsters, agreed to make concessions in wages in exchange for a stake in the company stock. But earlier this month Hostess' bakery union workers went on strike for a week over wages and benefits. Then Hostess called the bakers' bluff, announcing it would close. Three days into the strike, it closed three plants.

Were the union workers at fault? Maybe partly; they knew the company was on shaky ground. But workers dug in their heels. They claim that the company didn't develop new products or modernize its facilities. They said Hostess was paying out hefty executive bonuses even while the company was losing money.

Nope, it doesn't look promising for Hostess. But Twinkie lovers need not despair. Company officials say even if they close forever, they may sell the product line to Sara Lee or another potential buyer.

Meanwhile, those highly processed cakes that kids love but adults know are no good for them? They'll probably last forever on the shelf anyway. Buy now — and have a supply for life.

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